Allie Colman discusses the PATH Act changes, the R&D tax credit, FICA payroll taxes, income tax form 8974 and gross receipts limitations.

How Startups Can Get an Immediate Cash Benefit from the R&D Tax Credits


Allie Colman, an EisnerAmper tax manager discusses changes to the PATH Act that make the R&D tax credit very attractive to start-ups and small businesses. Allie covers the impact on the payroll and AMT taxes, who qualifies, how much the credits are worth and how to apply.

The first key impact is to payroll taxes. Small business that meet specified gross receipts thresholds can now apply a certain amount of its R&D tax credit – up to $250,000 annually – to offset its employer portion of FICA liability immediately, rather than carrying the credit forward to offset potential income tax liability.

Secondly, small businesses that pass certain business structure and gross receipts tests can utilize the credits to offset both the regular and alternative minimum tax.


Dave Plaskow: Hello and welcome to EisnerAmper’s podcast series, where we try to dig a little deeper on accounting and finance issues facing business professionals and their clients. Today’s topic is how startups can get an immediate cash benefit from R&D credits. I’m your host Dave Plaskow and with us today is Allie Colman, an EisnerAmper Tax Manager. Allie, welcome, and thanks for being here.
Allie Colman: Great to be here, Dave.

Alexandra Colman is a Senior Tax Manager serving clients in the life sciences, biotechnology, manufacturing and distribution, and retail industries. Allie works with large corporations, both public and private, on multistate returns and tax provisions.

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